Does Northern Bear PLC's (LON:NTBR) 31% Earnings Growth Reflect The Long-Term Trend?
Assessing Northern Bear PLC's (LON:NTBR) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess NTBR's latest performance announced on 31 March 2019 and evaluate these figures to its historical trend and industry movements.
See our latest analysis for Northern Bear
Did NTBR's recent earnings growth beat the long-term trend and the industry?
NTBR's trailing twelve-month earnings (from 31 March 2019) of UK£2.6m has jumped 31% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which NTBR is growing has accelerated. What's the driver of this growth? Well, let’s take a look at if it is solely due to industry tailwinds, or if Northern Bear has experienced some company-specific growth.
In terms of returns from investment, Northern Bear has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 7.4% is below the GB Consumer Durables industry of 10%, indicating Northern Bear's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Northern Bear’s debt level, has increased over the past 3 years from 9.0% to 12%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 30% to 6.3% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Northern Bear gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Northern Bear to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for NTBR’s future growth? Take a look at our free research report of analyst consensus for NTBR’s outlook.
Financial Health: Are NTBR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
